Surrender Value

whambam

Hi,

If the policyholder dies before maturity date of endowment policy is the payout the surrender value at time/date of death or previous premium payment? Also, do you get an option for payout or paying off the rest of the outstanding mortgage? We have been paying the mortgage for 20 years with 3 years remaining until expiry policyholder has passed away.

Also, is an endowment policy connected to life insurance in anyway or separate?

Thanks.

Auntie-Dolly

An endowment policy usually acts as life insurance for a sum agreed at the start. On death, this is the amount paid by the insurance company.

dunstonh

Also, is an endowment policy connected to life insurance in anyway or separate?

Endowments are a life assurance. Just one of the 13 or so different types of life assurance available (although most are no longer mainstream).

If the policyholder dies before maturity date of endowment policy is the payout the surrender value at time/date of death or previous premium payment?

It will be the sum assured on the policy or the value whichever is the higher.

Also, do you get an option for payout or paying off the rest of the outstanding mortgage?

Depends on the policy set up. If it is assigned to lender, the payout will go to lender. If it is single life and not in trust it will go to the estate. If it is joint life, first death (and not assigned) it will go to the other owner.

whambam

Auntie-Dolly wrote: »

An endowment policy usually acts as life insurance for a sum agreed at the start. On death, this is the amount paid by the insurance company.

This sum agreed is usually based on? Value of property, savings, income?

dunstonh wrote: »

Endowments are a life assurance. Just one of the 13 or so different types of life assurance available (although most are no longer mainstream).



It will be the sum assured on the policy or the value whichever is the higher.



Depends on the policy set up. If it is assigned to lender, the payout will go to lender. If it is single life and not in trust it will go to the estate. If it is joint life, first death (and not assigned) it will go to the other owner.

I belive it is a joint policy with my mothers name on it the lawyer did say that the executor will gain all proceeds and will require her signatures.

Thrugelmir

whambam wrote: »

This sum agreed is usually based on?

You need to read the policy documents themselves to determine the basis of the payout.

amnblog

You will probably find the sum assured is the same as the original target value of the endowment policy.

whambam

amnblog wrote: »

You will probably find the sum assured is the same as the original target value of the endowment policy.

I remember the policy documents states that the target value was £56K ,however the fund value was £12K and surrender value was £37K.

The mortgage expires in 2016 3 years time so I guess the outstanding mortgage debt is £7.5K remaining @ approx 200 pm interest only mortgage. I was about to deal with it, but would be better with the lawyer who is a good friend of my Dads.

dunstonh

I belive it is a joint policy with my mothers name on it the lawyer did say that the executor will gain all proceeds and will require her signatures.

Shouldnt do if the policy is joint owner.

whambam

Does anyone know how the surrender value is calculated?